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the frontier
all the sea and air
The ceded areas of Hong Kong could not be viable separated from the main industrial areas in the New Territories; in Kowloon would be impossible to control; approaches could be claimed as under de iure Chinese control as well as being under their de facto control,
Continued retention
of these areas would make no sense, either economically or
politically.
69, The timing of an offer to negotiate our withdrawal would
clearly need careful judgment. A number of the factors to be taken into account have already been mentioned notably, China's interest in reaching a solution and the possibility of handing Hong Kong over with its trade outlets to the Western world unimpaired (in itself greatly dependent on American willingness to co-operate). The present climate is not favourable in any of these important respects. At this point of time we can only indicate the broad limits of time which, in our opinion, may be available to us to make such an offer,
and there
The other
70.
As argued in Section E, genuine negotiations could not be mounted in present conditions in China and we cannot foresee when these may be more favourable. If we sought now to hand the Colony back we could not do so with any hope of discharging our obligations and responsibilities towards its people or of salvaging any appreciable portion of our assets; could be serious damage to relations with our allies, end of the time scale is determined by the strong probability that public confidence in the Colony's future will start to slip
it could become a and the economy to rundown in the 1980s; sericus liability to us and it would lose its value to China. All this points to an initiative on our part taken not later than the early 1980s and as soon as there emerges in China a regime with which we might be able to do business and which all our allies would be prepared to countenance · avoiding, however, any time when:
(a) the Hong Kong economy is showing weakness; (b) we are under any form of Chinese pressure either from
within or without the Colony.
or
71. There are also factors indicating that we should take the
The first opportunity that favourable circumstances offer. growth rate in the Hong Kong economy necessary to provide for a natural rate of population increase of the order of 2-3% and for a steadily improving standard of living may be difficult to maintain, since it is wholly dependent on growing world markets for the Colony's exports. Moreover, as the economic and military strength of China grows, Chinese pressure on the Colony is likely
to increase.
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/ We